Will we all pay when it collapses?
2006-12-27 00:37:38 · 9 answers · asked by 👑 Hypocrite 7 in Social Science ➔ Economics
David f - surely you assume that things move gently and smoothly. a collapse is a collapse is a collapse.
2006-12-27 01:12:32 · update #1
yes and very probably hunni
2006-12-27 00:39:31 · answer #1 · answered by Anonymous · 1⤊ 1⤋
No, not really. It's the operation of the law of supply and demand. There are insufficient houses on the market to fully satisfy demand - so prices rise. All the time people pay these prices inflation will continue. Sooner or later though the prices will outstrip the ability of people to pay (this may come from an outside factor such as interest rates/the economy in general) - then prices will go down again. This may be bad news for anyone with a mortgage for more than a house is worth, but good news for first time buyers. Then inflation starts all over again......
2006-12-27 08:54:17 · answer #2 · answered by david f 5 · 0⤊ 1⤋
First, you should separate land from houses in thinking about the price of housing. The price of houses -- the structure -- is pretty similar in Urbana, Illinois and Los Angeles, and determined by the cost of materials (the same because these are readily transportable) and the cost of labor (a bit higher in Los Angeles). The price of land varies widely, from $5,000 per acre to over $5,000,000. Economic forces imply that the price of housing is a combination of the two.
What should the price land be? The major determinants are commuting distances, school quality, and amenities (parks, entertainment, shopping, etc.). As urban population rises, traffic worsens, the value of living close to the places people work grows. This forces people to live further and bear large transportation costs (most of which is the value of time, not the cost of gasoline and wear and tear on the car), or pay more to live closer.
2006-12-27 20:13:47 · answer #3 · answered by RPM56 1 · 1⤊ 0⤋
High prices can only be obtained if banks and building societies provide the money. If we were only allowed to borrow 3 times earnings then sellers would not be able to charge what they like. No provision of silly money, no silly prices. It is a combination of low interest rates and greedy banks that have fuelled this situation. It cannot go on forever rising. It can't.
2006-12-27 10:50:27 · answer #4 · answered by Anonymous · 1⤊ 0⤋
If the collapse is just around the corner - don't buy the corner shop.
2006-12-27 08:44:10 · answer #5 · answered by ? 5 · 1⤊ 0⤋
the collapse is just around the corner ...the housing market is just another 'bubble' and bubbles have a habit of bursting.
2006-12-27 08:40:01 · answer #6 · answered by Anonymous · 1⤊ 0⤋
yes and no
Its total madness
only people who buy at these crazy prices will pay with it all comes tumbling down
2006-12-27 08:40:04 · answer #7 · answered by Anonymous · 1⤊ 0⤋
yup! but i dont think it will collapse again....
2006-12-27 08:40:06 · answer #8 · answered by confused 6 · 1⤊ 0⤋
Yep, it's gone mad!!!
2006-12-27 08:41:21 · answer #9 · answered by Anonymous · 1⤊ 0⤋